This is strong evidence of growing confidence in the management of the economy, Seth Terkper told the Joy FM’s Super Morning Show Friday.
The Finance Minister is glad that a first-quarter assessment of Ghana’s performance under the International Monetary Fund (IMF) programme has been positive.
The IMF has praised Ghana for balancing the budget and bringing wages under some form of control. The economy will be receiving a second tranche in excess of $100million as part of an over $900million bail-out spread over three years.
A statement from the IMF said “the programme is on track, with all performance criteria met except for the ceiling on central bank financing to the government which was technically missed by a small margin….Good revenue performance and containment of the wage bill and other spending as programmed contributed to this positive outcome”.
Acknowledging the progress the country has made, Seth Terkper said it is a very risky step for the World Bank to back a country’s activities in for example issuing a bond.
It could only be made because the Washington-based lender is reasonably assured that the economy is on track, he said.
“The World Bank will provide us with a guarantee to go to the market. It means that the market will take notice…so hopefully we will be able to issue our next bond maybe not for 10 years but for 15 years that means it allows 15 years to pay back and channel it towards capital project”, Seth Terkper explained.
According to the minister, the loan guarantee is one of three “major” steps the bank is taking to back Ghana’s economy in three “major” areas.
Other areas of “major” progress are the release of the remaining budgetary support that had been held up for the past two years.
He said the World Bank is also willing to give Ghana a “partial risk guarantee” in the supply of gas that is expected to minimize the impact of the energy crisis.